A new report from insider sources suggests that Microsoft's next video game console will require a persistent Internet connection to lock out second-hand games from being played on the system.

Edge is citing "sources with first-hand experience of Microsoft's next generation console" saying that games for the system will be available via download or as Blu-ray discs with a capacity of up to 50GB. The disc-based games will reportedly all ship with an activation code tying the game to a single user account, making the disc essentially worthless on the second-hand market.

Reports that Microsoft would use some method to stifle the secondhand game market on its next console first surfaced over a year ago, though this report is one of the strongest indications that such a system would require an Internet connection. Tying the system to the Internet would limit the next Xbox's potential reach, but maybe not as much as you might think—a 2010 study found that only 27 percent of Xbox 360s weren't connected to the Internet, and that number has likely declined in the years since.

Rumors surrounding Sony's next PlayStation suggest that Sony may also be looking into used-game-blocking technology for its system, but a recent patent application shows that Sony's method could use RFID chips embedded on discs rather than requiring an Internet connection. There's some legal question as to whether these kind of technical prevention methods would run afoul of the first-sale doctrine in the US. Sony is expected to announce more about its next home console on Feb. 20.

The Edge report also reiterates previously reported rumors regarding the next Xbox's technical specs: an AMD eight-core x64 1.6GHz CPU, a D3D11.x 800MHz GPU, and 8GB of DDR3 RAM. Edge also hints at an improved version of the Kinect 3D motion-sensing camera shipping alongside the new system.

I don't know if I have bought a used game since I had a Game Boy, and I really don't mind the whole one time code that ships with the game that unlock extra content or multi-player. But the idea an internet connection required to play my games and not being able to try out games a friend loans me or be able to check out games from Red Box to see how good they are before buying(there are ALOT of bad games out there,) will probably prevent me from buying the next gen XBox.

Well, piss on you Microsoft. At this rate I'm just buying a blu-ray player when my PS3 dies and forgoing the next generation of consoles entirely. There's got to be blu-ray players that let me stream from Netflix or Amazon.

First thought: oh well, no Next!Xbox for me, I'll just go with Next!PlayStation instead.

Second thought: Wait a second, if MS is implementing this there is no way Sony is not implementing it too. Because in any situation where only one of the companies is implementing it, they are basically committing market suicide.

Third thought: Well, actually, if only one of the two implements this, then that's where all the big publishers (and by this I mean jerks like EA, Activision) will go with their exclusives so in fact the company that does NOT implement this is really committing suicide.

So yeah, there's no way only one of the two will implement this. It will be either both or none.

Another thought: it's been about 30 years since the big video game crash (1982-1983), so perhaps it's time for a new one, you know, just to clear the air of all the crap that comes out of game publishers and hardware makers these days...

I doubt Microsoft will actually do this. Always online is going to kill a lot of rural sales right off the bat, due to slow or no internet connection and taking away second hand sales is going to piss off a good portion of the market.

A console I can't use if my internet connection is flaky is nowhere near worth the ~$500 this is likely to cost. If this comes about I guess I will finally give up on staying current with console gaming.

There's some legal question as to whether these kind of technical prevention methods would run afoul of the first-sale doctrine in the US.

IANAL but it seems like the proposed method wouldn't run afoul of the first-sale doctrine since it seems like Microsoft is making it so a used game is useless to someone else, as opposed asserting that the purchaser doesn't have the right to try and sell the game.

Seems to me that it wouldn't run afoul of first sale doctrine because they aren't preventing you from selling the plastic disc that the game comes on (MS anyway), but just because you sell it doesn't mean they have to honor the software license and let it to run on their network.

I want to be upset about this, but I feel like it has been coming for a while. The past couple of years, I've been dedicated to not buying a recently released game until the price drops to $25 or less. I've passed up on some for quite a while, but $60 is a lot to spend, especially if you can't recoup anything by selling it once you're done. I think stores that buy for the purpose of reselling (Gamestop) will probably have the most to lose due to this.

This is just one more nail in the coffin of "per game" sales. Whether it's music, games or applications, I think where there's any hope of sanity in the intangible world of ones and zeores is through subscriptions.

There's some legal question as to whether these kind of technical prevention methods would run afoul of the first-sale doctrine in the US.

IANAL but it seems like the proposed method wouldn't run afoul of the first-sale doctrine since it seems like Microsoft is making it so a used game is useless to someone else, as opposed asserting that the purchaser doesn't have the right to try and sell the game.

I'm in BFE, Montana where my internet is spotty at best. It's bad enough that I've had to tether off my phone with it's roaming edge connection. Sadly, that means I've had to quit WoW and don't play online much anymore. If I can't connect to the internet, then I can't play the games I pay for? I don't think so. I'm out. If they want my hard-earned dollars, then they need to scrap this idea.

Because they make exactly $0 for every time a used game is resold, as opposed to many $ every time a brand new copy goes into the hands of a new customer. More new retail copies shifted == more profit.

Because they're greedy and don't see 'direct' profit from those. The word there of course is 'direct', because used sales drive new sales (people selling old games to afford new ones etc.) Though they don't seem to understand this concept.

I'm not a fan of used sales of media, it's putting money in the pocket of shady companies like Gamestop instead of the developers. From the developers point of view, you might as well pirate it (I'm not against piracy). I think doing this is going to cause a lot of drama that's really unnecessary. Just restrict it to downloads only, and keep a sane system for moving the games around and re-downloads (like XBL already has). Steam Sale type prices are a far more effective and developer friendly way to get games you don't want to pay $60 for, rather than used.

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There's some legal question as to whether these kind of technical prevention methods would run afoul of the first-sale doctrine in the US.

I'd like to know what happens if your internet connection goes down or their servers fail. Is this going to be Diablo 3 all over again? If it is, forget it. That 27% figure doesn't mean much if you can't play when you lose your connection.

Maybe they are "leaking" this to gauge user reaction. If there is enough outrage they might scrap it.

I hope this is the case. If this proves to be true, this is an absolute deal-breaker for me for buying the next Xbox console. I buy a lot of second-hand games, and in doing so find games that are maybe a year or two old that lead up to me buying a newer game. Several titles I've started with an earlier version and worked my way up. If I could not have done that I would not have jumped on the newer game at all.

Also, I can't see stores like Gamestop or others letting this happen. They're killing an entire industry and games market if they do that. And ultimately hurting themselves because there would be less people playing the games. Less people playing means less money and less return customers.

Not totally true. Steam locks your downloaded game to your account. But not to any hardware. And that's key. In any number of years, MS may release a new XBOX system, and that will likely not be backwards compatible and all your games from the current gen will not be transferable. With Steam you can count on all your games on your current machine being transferable to your next game PC.

It remains to be seen if OUYA will have that advantage as well, but I'm guessing it will.

there is a huge difference between connected to the internet and an active stable around the clock connection to the internet. 27% 3 years ago, so probably about 20% of current x box's had no internet period, a very conservative estimate would probably say an additional 20-30 % of those have intermittent connectivity, half of your client base can't play games assuming this is correct? (yes you can buy the blu ray disc, but I assume it would use a Blizzard like activation and connect to the internet to check, also rumours about always online). I just find that a little hard to believe, could this "insider with first hand experience" possibly be on the marketing team and want free publicity?

I am one of those xBox owners who does not have it connected to the internet. I refuse to pay for online gaming in whatever form that takes. With Steam and Big Picture, who cares what next-gen consoles look like?

First thought: oh well, no Next!Xbox for me, I'll just go with Next!PlayStation instead.

Second thought: Wait a second, if MS is implementing this there is no way Sony is not implementing it too. Because in any situation where only one of the companies is implementing it, they are basically committing market suicide.

Third thought: Well, actually, if only one of the two implements this, then that's where all the big publishers (and by this I mean jerks like EA, Activision) will go with their exclusives so in fact the company that does NOT implement this is really committing suicide.

So yeah, there's no way only one of the two will implement this. It will be either both or none.

This would only apply if they were releasing them at the same time.

Microsoft is going first, Sony's already stated that. So Sony is taking a wait and see approach to see how Microsoft fares with this tactic. All the next next gen exclusives will already be heading to X-Box, since they will be going to market first, so your third thought is moot at the start.

I foresee it going one of three ways.

A) Gamers swallow this, pay the money, and Microsoft makes a profit and does well. If this occurs, Sony will mimic them, and Nintendo will follow. Used game market is gone.

B) Gamers avoid NextBox like the plague, Microsoft Games Division loses money hand over fist, and developers lose money hand over fist. Sony announces they would never do something so dastardly and stupid. Sony PSNext sells well, exclusives move to Sony, Microsoft flashily announces they're going to make things even better by disabling this.

C) Somewhere between A and B, with Microsoft not having the sales figures they would like, but not absolutely tanking. Developers scrape by, but aren't raking in huge profits either. Sony goes along with Microsoft and used gaming is gone.

The only way I see this not going down, if Microsoft tries the experiment, is if gamer's don't give them their money. Unfortunately, I think I'm going to be one of the holdouts who refuses to pay, rather than one of the horde that says 'Enough!'.

I wonder if this kind of system will cause older games to be more deeply discounted for download. Current console games rarely see deep discounts until well over a year after launch, which may be an artifact of the retailers wanting prices to remain high for the used game market. If there is no used game market, every sale is profitable for the publisher, so they may be more aggressive with pricing in order to get the game into as many hands as possible at a pure profit. This is basically what Steam does. I also like the idea that the games I've locked to my account may be downloadable in the future if I don't keep the disc handy.

I usually hold onto games though, so this isn't the kind of thing that has a downside for me.

For one thing, I normally buy new and then resell when I am done, so not being able to do that will annoy me.

For another, part of what I like about consoles is they normally just work. There are a lot fewer points of failure with a console than there is with a PC. While I normally do have my XBox 360 connected to the internet, I hate the idea of it being required and not working if my router is down at the moment or anything along those lines.

Kyle Orland / Kyle is the Senior Gaming Editor at Ars Technica, specializing in video game hardware and software. He has journalism and computer science degrees from University of Maryland. He is based in the Washington, DC area.